It proposed price escalation for the old fields, with an increase of $0.5 per metric million British thermal unit (mmBtu) annually with no change in pricing for the first two years or a $0.25 per mmBtu annually escalation for five years.
If the recommendations are implemented, state-run ONGC and OIL will have to reduce prices from the current record level of $8.57/mmbtu and this, in turn, will help improve the margins of city gas companies like IGL, MGL and Gujarat Gas.
Prices of compressed natural gas (CNG) and piped cooking gas have shot up by 70% in the last one year, on the back of a surge in input costs.
Producers of gas from legacy fields -- ONGC and OIL--stand to lose around ₹23,000 crore in FY24, if the panel's proposals are implemented, according to CareEdge Ratings.
The panel has suggested linking the price of gas produced by state-owned firms from fields given to them on a nomination basis to imported crude oil prices rather than benchmarking them to gas rates in the international markets, Parikh said, after submitting the report on Wednesday.
This story is from the December 01, 2022 edition of Financial Express Mumbai.
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This story is from the December 01, 2022 edition of Financial Express Mumbai.
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